TikTok owner ByteDance offers to buy back shares from employees at 7 per cent premium over previous round

The firm has offered to purchase shares from staff at US$170.81 each, up nearly 7 per cent from late last year
While its revenues continue to grow, ByteDance is grappling with new pressure from US lawmakers to divest TikTok or face a ban

ByteDance

Coco Fengin Beijing

Published: 6:30pm, 7 Mar 2024

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ByteDance, China’s most valuable unicorn and the owner of TikTok, has started a new round of share buy-backs for its global employees that price the equity higher than the previous round, according to two people familiar with the matter.

The Beijing-based company has offered to purchase shares from staff at US$170.81 each, up nearly 7 per cent from US$160 late last year. For former employees, the buy-back rate is US$145.19, around 13 per cent higher than US$128 in the previous round.

A ByteDance representative confirmed the numbers without elaborating.

The more generous buy-back plan suggests that the company’s valuation is growing in the private market along with its revenues and the popularity of its apps.

Founded by entrepreneur Zhang Yiming in 2012, ByteDance remains China’s highest-valued start-up, thanks to the mass appeal of its short video app TikTok in the US and other international markets, as well as the domestic version, Douyin.

As a privately held company, ByteDance does not disclose financial data. But according to reports by The Wall Street Journal and tech news site The Information, ByteDance’s revenue in the third quarter last year soared roughly 43 per cent year on year to US$30.9 billion. Total sales in the first nine months of the year rose 40 per cent to US$84.4 billion.

The results make ByteDance one of China’s largest and fastest-growing tech giants.

However, the company is grappling with mounting political pressure in the US. More than a dozen US lawmakers this week proposed a new bill to force ByteDance to sell TikTok or else the app would no longer be available on app stores or be accessible on web-hosting services in the country.

The move has thrown fresh uncertainty over the fate of TikTok in the US and the business prospects of ByteDance.

Since late 2022, US President Joe Biden has banned TikTok on devices owned by the federal government, while more than 30 US states have also prohibited the app on state-issued government devices. Similar bans exist in the European Union and Australia.

China to block new US moves forcing ByteDance to divest TikTok, analysts say

In May last year, Montana became the first US state to pass an outright TikTok ban on all personal devices, but the law was blocked by a federal judge before it was set to go into effect in January.

ByteDance has conducted share buy-backs for current and former employees since 2017, usually twice a year. As plans for an initial public offering remain in limbo, the company has also occasionally offered to repurchase shares from institutional investors.

The share buy-backs late last year put ByteDance’s valuation at around US$268 billion, or about 10 per cent lower than a year earlier. In September 2022, the company offered to repurchase shares from investors at US$177 each, giving it a valuation of US$300 billion.